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Industrias Bachoco Announces Second Quarter 2019 Results

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CELAYA, Mexico, July 22, 2019 /PRNewswire/ -- Industrias Bachoco, S.A.B. de C.V., "Bachoco" or "the Company", (NYSE:IBA, BMV: Bachoco)) announced today its unaudited results for the second quarter ("2Q19") and first half ("1H19") 2019 ended on June 30, 2019. All figures have been prepared in accordance with International Financial Reporting Standard ("IFRS") and are presented in nominal million Mexican Pesos ("$").

HIGHLIGHTS 2019

  • Net sales increased 4.1% in 2Q19 and decreased 1.0% in 1H19
  • EBITDA margin was 14.7% for 2Q19 and 10.1% in 1H19

CEO COMMENTS

Mr. Rodolfo Ramos Arvizu, Chief Executive Officer of Bachoco, stated: "This second quarter, we observed good levels of demand, particularly in Mexico. This led to improvements in prices for the poultry industry, which is in line with its seasonal behavior.

This improvement in prices, particularly in our poultry business line, allowed us to reach an increase in total sales of 4.1% for 2Q19 when compared to the same period of 2018. This effect, in combination with a lower cost of sales in terms of unit cost, led us to a gross margin of 22% for 2Q19 compared to the 19.2% of 2Q18.

We managed to keep our SG&A under control as a percentage of sales, 9.2% for the quarter and 9.7% for the first half of 2019 which is in line with the values reported for the same periods of 2018.

As a result, our operating profit for the quarter was $2,163.8 million which is 30.6% higher than the $1,656.4 million reported in 2Q18.

We reported and EBITDA of $2,483.3 million in 2Q19 which is 25.7% higher than the $1,976.0 million reported in 2Q18, that is 14.7% and 12.2% EBITDA margin for each period respectively. For the first half of the year our EBITDA margin was 10.1%, compared to 13.0% EBITDA margin of the same period of 2018.

We continue to keep focus on adding value to our shareholders. In 2Q19 we reported earnings per share of $2.65 compared to $2.62 of 2Q18; for the first half of 2019 we reported earnings per share of $3.15 compared to $4.72 for 1H18.

Our financial position remains solid.  By the end of the quarter we reported a net cash of $13,560 million which is allowing us to continue with our growth plans."

EXECUTIVE SUMMARY
The following financial information is expressed in millions of nominal pesos, except for amounts per share or per ADR, with comparative figures for the same period in 2018.

QUARTERLY RESULTS

NET SALES BY GEOGRAPHY





In millions of pesos


2Q19

2Q18

Change



$

$

$

%

Net Sales


16,884.1

16,213.6

670.5

4.1

Net sales in Mexico


12,537.4

11,553.9

983.4

8.5

Net sales in the U.S.


4,346.7

4,659.7

(313.0)

(6.7)

 

NET SALES BY SEGMENT





In millions of pesos


2Q19

2Q18

Change



$

$

$

%

Net Sales


16,884.1

16,213.6

670.5

4.1

Poultry


15,259.2

14,731.9

527.3

3.6

Other


1,624.9

1,481.7

143.2

9.7

 

NET VOLUME SOLD BY SEGMENT

In tons



Change


2Q19

2Q18

Volume

%

Total sales volume:

575,729

551,287

24,442.1

4.4

Poultry

436,570

431,315

5,254.8

1.2

Others

139,159

119,972

19,187.3

16.0






The Company's 2Q19 net sales totaled $16,884.1 million; $670.5 million or 4.1% more than   $16,213.6 million reported in 2Q18.  The increase is a result of better prices in poultry and higher volume sold in poultry and balanced feed.

In 2Q19, sales of our U.S. operations represented 25.8% of our total sales compared to 28.7% in 2Q18.

GROSS PROFIT





In millions of pesos


2Q19

2Q18

Change



$

$

$

%

Cost of sales


13,164.5

13,108.3

56.2

0.43

Gross profit


3,719.6

3,105.3

614.3

19.78

Gross margin


22.0%

19.2%

-

-

In 2Q19, cost of sales was $13,164.5 million; $56.2 million or 0.43% higher than $13,108.3 million reported in 2Q18. This increase was due higher volume sold.

The Company´s gross profit in 2Q19 was $3,719.6 million, 19.8% higher than the gross profit of $3,105.3 million in 2Q18, with a gross margin of 22.0% for 2Q19 vs 19.2% in 2Q18. This is a result of higher prices in poultry.

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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A")

 

In millions of pesos


2Q19

2Q18

Change

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